Business News Roundup, June 10

Published 4:25 pm, Tuesday, June 9, 2015

Robert Gibbs, with President Obama in 2009, is the new communications director of McDonald’s.

Robert Gibbs, with President Obama in 2009, is the new communications director of McDonald’s.

Photo: Charles Dharapak, AP

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DETRIOT, MI - JUNE 9: General Motors CEO Mary Barra holds a media briefing prior to the start of the 2015 GM Annual Meeting of Stockholders at GM world headquarters June 9, 2015 in Detroit, Michigan. At the meeting, stockholders will vote on the election of directors, and ratify the selection of Deloitte and Touche as the company's independent registered public accounting firm for 2015. (Photo by Bill Pugliano/Getty Images) less

DETRIOT, MI - JUNE 9: General Motors CEO Mary Barra holds a media briefing prior to the start of the 2015 GM Annual Meeting of Stockholders at GM world headquarters June 9, 2015 in Detroit, Michigan. At the ... more

Photo: Bill Pugliano, Getty Images

Business News Roundup, June 10

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Public relations

Gibbs to join McDonald’s

McDonald’s has named former White House press secretary Robert Gibbs as its global chief communications officer, as the fast-food giant looks to improve its image.

The world’s biggest hamburger chain said Tuesday that Gibbs will manage the company’s communications and government affairs and help to improve its well-known brand. He replaces Bridget Coffing, who announced her retirement earlier this year.

Gibbs served as President Obama’s first White House press secretary and as a senior adviser during the president’s re-election campaign. He then co-founded the Incite Agency, a strategic communications advisory firm.

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McDonald’s CEO Steve Easterbrook said in a company statement that both Gibbs and new Chief Marketing Officer Silvia Lagnado will offer a wealth of experience and outside perspective “as we build a more modern, progressive burger company.”

Lagnado created Dove’s “Campaign for Real Beauty” and spent more than 20 years at consumer products maker Unilever. She also has worked as chief marketing officer for Bacardi.

Easterbrook took over as CEO in March and has been fighting to revive sluggish sales for the company, which has more than 36,00 locations globally. McDonald’s said Monday that sales from established locations dipped last month, with weakness in the U.S. and some overseas markets.

Automakers

GM chief talks

of investigation

General Motors CEO Mary Barra confirmed Tuesday that she has been interviewed by the Justice Department in its criminal probe of how the company handled a deadly ignition switch problem in older small cars.

Barra told reporters the interview happened last year but said she didn’t know when the U.S. attorney’s office in Manhattan would release the results of its probe.

“We have cooperated fully. We continue to do that,” she said. “It is their timeline,” she said about when charges could be filed.

Wire fraud probably is among the statutes being considered by federal investigators, because GM used electronic communications to interact with the government’s National Highway Traffic Safety Administration. Investigators are focused on whether GM failed to notify the agency of the switch problems and potentially tried to hide them. Automakers must notify the federal agency within five days of finding out about a safety defect.

The switches in cars such as the Chevrolet Cobalt and Saturn Ion can slip out of the run position, shutting off the engine and disabling power steering, power brakes and air bags. The problem has caused at least 111 deaths and hundreds of injuries.

GM has acknowledged knowing about the problem for more than a decade, yet it didn’t recall the 2.6 million cars until last year.

Acquisitions

Kraft, Heinz

deal advances

The proposed acquisition of Kraft Foods Group by H.J. Heinz cleared a waiting period required under law, bringing the deal one step closer to completion, the companies said Tuesday.

Kraft shareholders are set to vote July 1 on whether the company should be acquired by the ketchup maker. The combination would create the third-largest food and beverage company in North America and the fifth-largest worldwide.

Terms call for each share of Kraft to be converted into the right to one share of Kraft Heinz. Kraft will also declare a cash dividend of $16.50 per Kraft share.

Heinz’s owners are expected to own about 51 percent of the new company, with Kraft shareholders holding the rest.

Campbell’s

adds salsa firm

Campbell Soup is buying refrigerated salsa maker Garden Fresh Gourmet for $231 million as it continues to make a push into hot categories such as refrigerated fresh and organic foods.

This is the latest acquisition by Campbell, which wants to keep pace with increasing interest in fresh and organic products as people lose their taste for its trademark canned soups. The company purchased food company Bolthouse Farms in 2012 and organic baby food company Plum in 2013.

Campbell Soup has seen sales of its canned soups and vegetable juice decline as Americans shift toward foods they feel are fresher or more wholesome. Campbell’s brands include V8 Juice, Pepperidge Farm cookies, Prego pasta sauces and its namesake soups.

Sales of canned soups in particular are down, and the company wants to appeal to younger shoppers with products like its Campbell’s Go soups in microwavable pouches, which come in flavors like Spicy Chorizo and Golden Lentil with Madras Curry.

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